June 12th S&OP Webinar by Supply Chain Insights, LLC
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Transcript of June 12th S&OP Webinar by Supply Chain Insights, LLC
TM
S&OP: State of the Union
June 2013
Supply Chain Insights LLC Copyright © 2013, p. 2#sciwebinar
Presenters
Benji GreenAvaya
Lora CecereSupply Chain
Insights
Jack LyonEnterasys
Supply Chain Insights LLC Copyright © 2013, p. 3#sciwebinar
Supply Chain Insights is focused on delivering independent, actionable and objective advice for supply chain leaders. A company dedicated to research, turn to us when you want the latest insights on supply chain trends, technologies to know and metrics that matter.
About Us
Supply Chain Insights LLC Copyright © 2013, p. 4#sciwebinar
Sales & Operations Planning:
State of the UnionJack Lyon Vice President, OperationsEnterasys NetworksJune 2013
Supply Chain Insights LLC Copyright © 2013, p. 5#sciwebinar
• Network Powered by INNOVATION• Delivering the Highest Quality User EXPERIENCE• Guiding Principles PEOPLE TECHNOLGY SERVICE• Solutions WI-FI MOBILITY DATA CENTER UNIFIED
MANAGEMENT
5
Leader in Wired and Wireless Network Infrastructure and Security Solutions
Supply Chain Insights LLC Copyright © 2013, p. 6#sciwebinar
Getting To Mature S&OP
• Journey started in 2004• Faced a number of challenges• Collaborative approach• Tools played a big part• Short time to measured success• Setting up for the long term
Enterasys in the Cloud: Quote to Demand
6
Supply Chain Insights LLC Copyright © 2013, p. 7#sciwebinar
• Stay committed to the process– Over communicate with
shareholders• Set aggressive targets
– post mortems & lessons learned• Continuous Improvement
– Drive initiatives to move the process forward
7
Driving Towards Orchestrating
Supply Chain Insights LLC Copyright © 2013, p. 8#sciwebinar
CUSTOMERSTHERE IS NOTHING MORE IMPORTANT THAN OUR
OUR BELIEF
Supply Chain Insights LLC Copyright © 2013, p. 9#sciwebinar
• Avaya is the global business communications expert delivering open and flexible communication systems, that transform the way people collaborate to enhance performance and enable growth for companies small to large at lowest possible total cost of ownership.
Who is Avaya?
UnifiedCommunications
Call Center
Data Networking
Services & Maintenance
Small & Medium Enterprise
Enterprise
Gov Solutions Midsize Enterprise
Supply Chain Insights LLC Copyright © 2013, p. 10#sciwebinar
Future State• BIC FA at 85+%• Balanced Scorecard Fact-Based Decision
Making with Aligned Incentives• Fully Integrated Supplier & Distributor Co-
Planning & Advanced Funnel Analytics• Simplified and controlled Portfolio• Kinaxis driven Scenario Modeling, Decision
Support, and Alert System
49FY13-15 Strategic Planning Avaya – Confidential & Proprietary -- For Internal Use Only
S&OP Maturity Model
Key Takeaways
• S&OP Maturity measured across people, processes, and tools
• Customer collaboration is significant opportunity to improve S&OP process & results
• Transition management (customer\product)
Organization
SupplierCollaboration
CustomerCollaboration
DemandDetermination
Tools &Enablers
Outputs
Measurements
Level 1Non-existent
Level 2Developing
Level 3Basic
Level 4Advanced
Level 5World-class
No forecastaccountability
Forecast availabilitybased on past supply
Multiple forecasts basedon historical data andcurrent inventory levels
Based only on historicalsales and simple allocationto functional areas
No data integrity,simple tools;no data mining
Forecasts notdisseminated
Forecast accuracy below50% or not measured
Centrally managed forecastingsystem with decentralizedadjustment process
Vendor managed inventory(VMI), Profit Sharing
Customer collaboration(CPFR)
Consensus demand plan based onkey account forecasts and multi-tierforecasting
Future intelligence historicallybased
Consensus forecasts used in related planning
Defined composite matrix/Score card that is aligned withsupply chain roles
Bes
t pra
ctic
es
AVAYA
AVAYA
AVAYA
AVAYA
AVAYA
AVAYA
AVAYA Theater FA, Exp
SFDC Utilizaton
DistyReplen Demand
ShapingAcct TrsMngmt
VMI&PrftShare
Common Incentive
ConsensFcst
KinaxisRR
Risk Mngmt
Bottom’s Up Plan
Metric Optimize
COE
SupplierCo-Plan
S&OP Transfo
rmatio
n
Environment
• Limited funnel visibility @ code level• Lack of Disty Collaborative Fcst• Short customer lead-times; long supplier
lead-times• Increased Asia sourcing & migration to
ocean in order to lower costs• Excessive # of SKU’s• Portfolio Redundancy• High-mix/low-volume business• Difficult transition management
Aggressive Portfolio Simplification - Reduce Code Count by 50%, - Eliminate Portfolio Redundancy - Component Standardization
Accelerate Forward Visibility - Increase SFDC Utilization - Distributor Co-Planning - Advanced Funnel Analytics
Integrated S&OP IT Platform - Single Source of Data - Multi-variable Statistical modeling - Integrated Supply/Demand Scenario Analysis
Robust Transition Management - Sales Supporting ‘Center of Excellence’ - Top 50 Customer Transition Roadmap - Partner & Customer Demand Shaping
Begin with the End in Mind?
Dynamic Supply Flexibility - CM Component Flexibility Model - Vendor Managed Inventory & Logistics Hubbing - Kinaxis EtoE component to Disty Inventory visibility
Supply Chain Insights LLC Copyright © 2013, p. 11#sciwebinar
Developing S&OP Agility?
Understand the Risk!
• Forecast are wrong, which way is the greatest volatility• Operational risk vary dramatically by code
Operational Impact• Expedited Freight• Inventory Costs • Carrying Costs• PCR Roadmap
• RFMV Risk• Mfg Transitions
• Supply Flexibility• Customer Sat• Sales Margin
Demand Volatility:• Forecast Accuracy• Demand Volatility
• Market Trend• Large Bids• Lifecycle
• Order Fill to Track• Disty Sales Out
• Disty Days On Hand
How much and which direction might my forecast be wrong?!
Which way and how much can I afford to be wrong?!
Develop a Playbook!
• What risk mitigation strategy’s can we deploy in advance• What actions/levers can drive recovery if we’re wrong?
Supply Chain Insights LLC Copyright © 2013, p. 12#sciwebinar
Study Overview
Supply Chain Insights LLC Copyright © 2013, p. 13#sciwebinar
Study Results
Supply Chain Insights LLC Copyright © 2013, p. 14#sciwebinar
Build with the End in Mind
Supply Chain Insights LLC Copyright © 2013, p. 15#sciwebinar
Greatest Alignment Opportunity:Sales & Operations
Supply Chain Insights LLC Copyright © 2013, p. 16#sciwebinar
Gaps
Supply Chain Insights LLC Copyright © 2013, p. 17#sciwebinar
Top S&OP Challenge
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Operating Margin Is Among Most Tracked and Used to Meet Corporate Goals
Supply Chain Insights LLC Copyright © 2013, p. 19#sciwebinar
• Important, but progress is inching along
• S&OP improves agility and alignment
• The understanding of the executive team is a barrier
Conclusion
Supply Chain Insights LLC Copyright © 2013, p. 20#sciwebinar
Our Focus
2-DAY PUBLIC TRAINING
Princeton – June 24-25Minneapolis – August 8-9
$1500
GLOBAL SUMMIT
PODCASTS
www.supplychaininsights.com
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 21#sciwebinar
PAST SUPPLY CHAIN INDEX WEBINARS:
AVAILABLE ON DEMAND• From September 24, 2012:
The Supply Chain Index, 20 Years in the Making: A Focus on Process Industries
• From October 26, 2012: The Supply Chain Index, 20 Years in the Making: A Focus on Discrete Industries
Webinars
www.supplychaininsights.com/upcoming-webinars
UPCOMING WEBINARS
• June 27th: Supply Chain Index III, Technology/ Apparel/
• July 11th: Big Data Supply Chains and the Future of Analytics
• August 15th: State of Supply Chain Talent: Missing Link in the Supply Chain